Today's Law As Amended


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SB-662 Energy: transportation sector: hydrogen.(2019-2020)



As Amends the Law Today


SECTION 1.
 (a) This act shall be known, and may be cited, as the Hydrogen Transportation Electrification Act of 2020.
(b) The Legislature finds and declares all of the following:
(1) Hydrogen fuel cell electric vehicles are electrically driven vehicles that produce zero emissions of greenhouse gases, criteria air pollutants, or toxic air contaminants.
(2) Hydrogen fuel cell electric vehicles are a commercially available, one-for-one replacement technology for conventional, petroleum-fueled vehicles in heavy-, medium-, and light-duty applications.
(3) Hydrogen fuel cell electric vehicles will be critical components in achieving the state’s air quality and climate change goals through successful implementation of laws and regulations, including, but not limited to, the Innovative Clean Transit regulations (Article 4.3 (commencing with Section 2023) of Chapter 1 of Division 3 of Title 13 of the California Code of Regulations), the Zero-Emission Airport Shuttle Regulation (Subarticle 14 (commencing with Section 95690.1) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations), the Zero-Emission Vehicle Program (Sections 1962.2 and 1962.3 of Title 13 of the California Code of Regulations), the In-Use Off-Road Diesel-Fueled Fleets Regulation (Article 4.8 (commencing with Section 2449) of Chapter 9 of Division 3 of Title 13 of the California Code of Regulations), the commercial harbor craft regulations (Section 2299.5 of Title 13 of, and Section 93118.5 of Title 17 of, the California Code of Regulations), the State Air Resources Board’s proposed revisions to Title 13 of the California Code of Regulations known as the Proposed Advanced Clean Trucks Regulation, the state implementation plan required by the Clean Air Act (42 U.S.C. Sec. 7401 et seq.), the scoping plan adopted by the State Air Resources Board pursuant to Section 38561 of the Health and Safety Code, the short-lived climate pollutant reduction strategy adopted by the State Air Resources Board pursuant to Chapter 4.2 (commencing with Section 39730) of Part 2 of Division 26 of the Health and Safety Code and Chapter 13.1 (commencing with Section 42652) of Part 3 of Division 30 of the Public Resources Code, and reducing emissions of greenhouse gases to 40 percent below 1990 levels by 2030.
(4) The production of hydrogen has many pathways, each with distinct potential benefits and cobenefits that promote California’s existing public health and environmental quality goals, including, but not limited to, reducing the carbon intensity of transportation fuels, reducing emissions of greenhouse gases, including emissions of short-lived climate pollutants, and improving air quality by reducing emissions of criteria air pollutants from both vehicles and fuel production facilities.
(5) Hydrogen transportation fuel currently has a higher renewable content than average California grid electricity and it is technologically and economically feasible to further decarbonize hydrogen transportation fuel at the same pace as electricity under The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018).
(6) Ensuring that renewable standards for hydrogen transportation fuel align with those set forth by the state for electricity under The 100 Percent Clean Energy Act of 2018 will ensure that hydrogen transportation fuel is at least as clean and renewable as electricity in the state.

SEC. 2.

 Section 43869 of the Health and Safety Code is amended to read:

43869.
 (a) The state board shall, no later than July 1, 2008, develop and, after at least two public workshops, adopt hydrogen fuel regulations to ensure the following:
(1) That state funding for the production and use of hydrogen fuel, as described in the California Hydrogen Highway Blueprint Plan, contributes to the reduction of greenhouse gas emissions, criteria air pollutant emissions, and toxic air contaminant emissions. The regulations, at a minimum, shall do all of the following:
(A) Require that, on a statewide basis, well-to-wheel emissions of greenhouse gases for the average hydrogen-powered vehicle fueled by hydrogen from fueling stations that receive state funds are at least 30 percent lower than emissions for the average new gasoline vehicle in California when measured on a per-mile basis.
(B) (i) Require that, on a statewide basis, no less than 33.3 percent of the hydrogen produced for, or dispensed by, fueling stations that receive state funds be made from eligible renewable energy resources as defined in Section 399.12 of the Public Utilities Code.
(ii) If the state board determines that there is insufficient availability of hydrogen fuel from eligible renewable resources to meet the 33.3-percent requirement of this subparagraph, the state board may, after at least one public workshop and on a one-time basis, reduce the requirement by an amount, not to exceed 10 percentage points, that the state board determines is necessary to result in a renewable percentage requirement for hydrogen fuel that is achievable.
(iii) If the executive officer of the state board determines that it is not feasible for a public transit operator to use hydrogen fuel made from eligible renewable resources, the executive officer may exempt the operator from the requirements of this subparagraph for a period of not more than five years and may extend the exemption for up to five additional years.
(C) Prohibit hydrogen fuel producers from counting as a renewable energy resource, pursuant to clause (i) of subparagraph (B), any electricity produced from sources previously procured by a retail seller and verifiably counted by the retail seller towards meeting the renewables portfolio standard obligation, as required by Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code.
(D) Require that all hydrogen fuel dispensed from fueling stations that receive state funds be generated in a manner so that local well-to-tank emissions of nitrogen oxides plus reactive organic gases are at least 50 percent lower than well-to-tank emissions of the average motor gasoline sold in California when measured on an energy equivalent basis.
(E) Require that well-to-tank emissions of relevant toxic air contaminants for hydrogen fuel dispensed from fueling stations that receive state funds be reduced to the maximum extent feasible at each site when compared to well-to-tank emissions of toxic air contaminants of the average motor gasoline fuel on an energy equivalent basis. In no case shall the toxic emissions be greater than the emissions from gasoline on an energy equivalent basis.
(F) Require that providers of hydrogen fuel for transportation in the state report to the state board the annual mass of hydrogen fuel dispensed and the method by which the dispensed hydrogen was produced and delivered.
(G) Authorize the state board, after at least one public workshop, to grant authority to the executive officer of the state board to exempt from this paragraph, for a period of no more than five years, hydrogen dispensing facilities constructed for small demonstration or temporary purposes. The exemption may be extended on a case-by-case basis upon a finding that the extension will not harm public health. The executive officer may limit the total number of exemptions by geographic region, including by air district, but the average annual mass of hydrogen dispensed from exempted facilities shall not exceed 10 percent of the total mass of hydrogen fuel dispensed for transportation purposes in the state.
(2) That, in any year immediately following a 12-month period in which the mass of hydrogen fuel dispensed for transportation purposes in California exceeds 3,500 metric tons, the production and direct use of hydrogen fuels for motor vehicles in the state, including, but not limited to, any hydrogen highway network that is developed pursuant to the California Hydrogen Highway Blueprint Plan, contributes to a reduced dependence on petroleum, as well as reductions in greenhouse gas emissions, criteria air pollutant emissions, and toxic air contaminant emissions. For the purpose of this paragraph, the regulations, at a minimum, shall do all of the following:
(A) Require that, on a statewide basis, well-to-wheel emissions of greenhouse gases for the average hydrogen-powered vehicle in California are at least 30 percent lower than emissions for the average new gasoline vehicle in California when measured on a per-mile basis.
(B) (i)  Require that, on a statewide basis, no less than 33.3 percent of the hydrogen produced or dispensed in California for motor vehicles be made from eligible renewable energy resources  renewable hydrogen,  as defined in Section 399.12 of the Public Utilities Code. 95481 of Title 17 of the California Code of Regulations. 
(ii) Require that, by December 31, 2024, on a statewide basis, no less than 44 percent of the hydrogen produced or dispensed in California for motor vehicles be renewable hydrogen.
(iii) Require that, by December 31, 2027, on a statewide basis, no less than 52 percent of the hydrogen produced or dispensed in California for motor vehicles be renewable hydrogen.
(iv) Require that, by December 31, 2030, on a statewide basis, no less than 60 percent of the hydrogen produced or dispensed in California for motor vehicles be renewable hydrogen.
(v) Require that, by December 31, 2045, on a statewide basis, 100 percent of the hydrogen produced or dispensed in California for motor vehicles be either renewable hydrogen or clean hydrogen produced using zero-carbon resources, as that term is used in Section 454.53 of the Public Utilities Code.
(C) Prohibit hydrogen fuel producers from counting as a renewable energy resource, for purposes of subparagraph (B), any electricity produced from sources previously procured by a retail seller and verifiably counted by the retail seller towards meeting the requirements established by the California Renewables Portfolio Standard Program, as set forth in Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code.
(D) Require that all hydrogen fuel dispensed in California for motor vehicles be generated in a manner so that local well-to-tank emissions of nitrogen oxides plus reactive organic gases are at least 50 percent lower than well-to-tank emissions of the average motor gasoline sold in California when measured on an energy equivalent basis.
(E) Require that well-to-tank emissions of relevant toxic air contaminants from hydrogen fuel produced or dispensed in California be reduced to the maximum extent feasible at each site when compared to well-to-tank emissions of toxic air contaminants of the average motor gasoline fuel on an energy equivalent basis. In no case shall the toxic emissions from hydrogen fuel be greater than the toxic emissions from gasoline on an energy equivalent basis.
(F) Authorize the state board, after at least one public workshop, to grant authority to the executive officer of the state board to exempt from this paragraph, for a period of no more than five years, hydrogen dispensing facilities that dispense an average of no more than 100 kilograms of hydrogen fuel per month. The exemption may be extended on a case-by-case basis by the executive officer upon a finding that the extension will not harm public health. The executive officer may limit the total number of exemptions by geographic region, including by air district, but the average annual mass of hydrogen dispensed statewide from exempted facilities shall not exceed 10 percent of the total mass of hydrogen fuel dispensed for transportation purposes in the state.
(G) Authorize the state board, if it determines that reporting is necessary to facilitate enforcement of the requirements of this paragraph, to require that providers of hydrogen fuel for transportation in the state report to the state board the annual mass of hydrogen fuel dispensed and the method by which the dispensed hydrogen was produced and delivered.
(b) Notwithstanding paragraph (2) of subdivision (a), the state board may increase the 3,500-metric-ton threshold in paragraph (2) of subdivision (a) by no more than 1,500 metric tons if at least one of the following requirements is met:
(1) The 3,500-metric-ton threshold is first met prior to January 1, 2011.
(2) The state board determines that the 3,500-metric-ton threshold has been met primarily due to hydrogen fuel consumed in heavy duty vehicles.
(3) The state board determines at a public hearing that increasing the threshold would accelerate the deployment of hydrogen fuel cell vehicles in the state.
(c) The state board, in consultation with other relevant agencies as appropriate, shall review the renewable resource requirements adopted pursuant to this section every four years and shall increase the renewable resource percentage requirements if it determines that it is technologically feasible to do so and will not substantially hinder the development of hydrogen as a transportation fuel in a manner that is consistent with this section.
(d) The state board shall review the emission requirements adopted pursuant to this section every four years and shall strengthen the requirements if it determines it is technologically feasible to do so and will not substantially hinder the development of hydrogen as a transportation fuel in a manner that otherwise is consistent with this section.
(e) The state board shall produce and periodically update a handbook to inform and educate motor vehicle manufacturers, hydrogen fuel producers, hydrogen service station operators, and other interested parties on how to comply with the requirements set forth in this section. This handbook shall be made available on the agency’s Internet Web site  internet website  on or before July 1, 2009.
(f) The Secretary for Environmental Protection shall convene the California Environmental Protection Agency’s Environmental Justice Advisory Committee at least once annually to solicit the committee’s comments on the production and distribution of hydrogen fuel in the state.
(g) The Secretary for Environmental Protection, in consultation with the state board, shall recommend to the Legislature and the Governor, on or before January 1, 2010, incentives that could be offered to businesses within the hydrogen fuel industry and consumers to spur the development of clean sources of hydrogen fuel.
(h) Unless the context requires otherwise, the definitions set forth in this subdivision govern the construction of this section:
(1) “Well-to-tank emissions” means emissions resulting from production of a fuel, including resource extraction, initial processing, transport, fuel production, distribution and marketing, and delivery into the fuel tank of a consumer vehicle.
(2) “Well-to-wheel emissions” means emissions resulting from production of a fuel, including resource extraction, initial processing, transport, fuel production, distribution and marketing, and delivery and use in a consumer vehicle.

SECTION 1.SEC. 3.

 Section 237.5 of the Public Utilities Code is amended to read:

237.5.
 “Transportation electrification” means the use of electricity from external sources of electrical power,  sources,  including the electrical grid, for all or part of to power, in whole or in part,  vehicles, vessels, trains, boats, or other equipment that are mobile sources of air pollution and greenhouse gases and the related programs and charging  charging, fueling,  and propulsion infrastructure investments to enable and encourage this use of electricity. Transportation electrification also includes renewable hydrogen, as defined in Section 43869 of the Health and Safety Code, that has a renewables content that is equal to or greater than the eligible renewable energy resource procurement requirements of Sections 399.15, 399.30, and 454.53, when the hydrogen is used directly as a transportation fuel in fuel cell electric vehicles. 

SEC. 3.SEC. 4.

 Section 400.3 of the Public Utilities Code is amended to read:

400.3.
 The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage, and shall consider other potential uses of green electrolytic hydrogen. hydrogen, including its use as an alternative transportation fuel. 

SEC. 5.

 Section 740.3 of the Public Utilities Code is amended to read:

740.3.
 (a) The commission, in cooperation with the Energy Commission, the State Air Resources Board, air quality management districts and air pollution control districts, regulated  electrical and corporations,  gas corporations, and the motor vehicle industry, shall evaluate and implement policies to promote the development of equipment and infrastructure needed to facilitate the use of electricity  electricity, hydrogen,  and natural gas to fuel low-emission vehicles. Policies to be considered shall include both of  the following:
(1) The sale-for-resale and the rate-basing of low-emission vehicles and supporting equipment equipment,  such as batteries for electric vehicles and  vehicles,  compressor stations for natural gas fueled vehicles. vehicles, and pipelines, distribution, and make-ready infrastructure for the use of hydrogen as a transportation fuel. 
(2) The development of statewide standards for electric vehicle charger connections and compressed natural gas vehicle fueling connections, including installation procedures and technical assistance to installers.
(b) The commission shall hold public hearings as part of its effort to evaluate and implement the new policies considered in subdivision (a).
(c) The commission’s policies authorizing utilities to develop equipment or infrastructure needed for electricity-powered  electricity-powered, hydrogen fuel cell electricity-powered,  and natural gas-fueled low-emission vehicles shall ensure that the costs and expenses of those programs are not passed through to electrical or gas ratepayers unless the commission finds and determines that those programs are in the ratepayers’ interest. The commission’s policies shall also ensure that utilities do not unfairly compete with nonutility enterprises.

SEC. 4.SEC. 6.

 Section 740.8 of the Public Utilities Code is amended to read:

740.8.
 As used in Section 740.3 or 740.12, “interests” of ratepayers, short- or long-term, mean direct benefits that are specific to ratepayers, consistent with both of the following:
(a) Safer, more reliable, or less costly gas or electrical service, consistent with Section 451, including electrical service that is safer, more reliable, or less costly due to either improved use of the electric system or improved integration of renewable energy generation.
(b) Any one of the following:
(1) Improvement in energy efficiency of travel.
(2) Reduction of health and environmental impacts from air pollution.
(3) Reduction of greenhouse gas emissions related to electricity and natural gas production and use.
(4) Increased use of alternative fuels. fuels, including hydrogen for the transportation sector. 
(5) Creating high-quality jobs or other economic benefits, including in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.

SEC. 5.SEC. 7.

 Section 740.12 of the Public Utilities Code is amended to read:

740.12.
 (a) (1) The Legislature finds and declares all of the following:
(A) Advanced clean vehicles and  vehicles, including battery electric and hydrogen fuel cell electric vehicles, and  fuels are needed to reduce petroleum use, to meet air quality standards, to improve public health, and to achieve greenhouse gas emissions reduction goals.
(B) Widespread transportation electrification is needed to achieve the goals of the Charge Ahead California Initiative (Chapter 8.5 (commencing with Section 44258) of Part 5 of Division 26 of the Health and Safety Code).
(C) Widespread transportation electrification requires increased access for disadvantaged communities, low- and moderate-income communities, and other consumers of zero-emission and near-zero-emission vehicles, and  including battery electric and hydrogen fuel cell electric vehicles, and  increased use of those vehicles in those communities and by other consumers to enhance air quality, lower greenhouse gases emissions, and promote overall benefits to those communities and other consumers.
(D) Reducing emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050 will require widespread transportation electrification.
(E) Widespread transportation electrification requires electrical corporations to increase access to the use of electricity as a transportation fuel.
(F) Widespread transportation electrification should stimulate innovation and competition, enable consumer options in charging and fueling  equipment and services, attract private capital investments, and create high-quality jobs for Californians, where technologically feasible.
(G) Deploying electric vehicles should assist in grid management, integrating generation from eligible renewable energy resources, and reducing fuel costs for vehicle drivers who charge in a manner consistent with electrical grid conditions.
(H) Deploying electric vehicle charging infrastructure  and hydrogen fueling infrastructure and producing hydrogen for use in the transportation sector  should facilitate increased sales of electric zero-emission  vehicles by making charging and hydrogen fueling  easily accessible and should provide the opportunity to access electricity and hydrogen  as a fuel that is cleaner and less costly than gasoline or other fossil fuels in public and private locations.
(I) According to the State Alternative Fuels Plan analysis by the Energy Commission and the State Air Resources Board, light-, medium-, and heavy-duty vehicle electrification results in approximately 70 percent fewer greenhouse gases emitted, over 85 percent fewer ozone-forming air pollutants emitted, and 100 percent fewer less  petroleum used. These reductions will become larger as renewable generation increases.
(2) It is the policy of the state and the intent of the Legislature to encourage transportation electrification as a means to achieve ambient air quality standards and the state’s climate goals. Agencies designing and implementing regulations, guidelines, plans, and funding programs to reduce greenhouse gas emissions shall take the findings described in paragraph (1) into account.
(b) The commission, in consultation with the State Air Resources Board and the Energy Commission, shall direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative (Chapter 8.5 (commencing with Section 44258) of Part 5 of Division 26 of the Health and Safety Code), and reduce emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050. Programs proposed by electrical corporations shall seek to minimize overall costs and maximize overall benefits. The commission shall approve, or modify and approve, programs and investments in transportation electrification, including those that deploy charging infrastructure, via a reasonable cost recovery mechanism, mechanism  if they are consistent with this section, do not unfairly compete with nonutility enterprises as required under Section 740.3, include performance accountability measures, and are in the interests of ratepayers as defined in Section 740.8.
(c) As part of a separate proceeding from those initiated pursuant to subdivision (b), the commission, in consultation with the State Air Resources Board and the Energy Commission, shall authorize gas corporations to file applications for investments in programs to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, and reduce emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050. Programs proposed by gas corporations shall seek to minimize overall costs and maximize overall benefits. The commission shall approve, or modify and approve, programs and investments in transportation electrification, including hydrogen and hydrogen-related pipelines, distribution, and make-ready infrastructure for hydrogen, via a reasonable cost recovery mechanism if they are consistent with this section, do not unfairly compete with nonutility enterprises, as required by Section 740.3, include performance accountability measures, and are in the interests of ratepayers as defined in Section 740.8.
(c) (d)  The commission shall review data concerning current and future electric transportation adoption and charging and fueling  infrastructure utilization prior to authorizing an electrical corporation to collect new program costs related to transportation electrification in customer rates. If market barriers unrelated to the investment made by an electric corporation prevent electric transportation from adequately utilizing available charging and fueling  infrastructure, the commission shall not permit additional investments in transportation electrification without a reasonable showing that the investments would not result in long-term stranded costs recoverable from ratepayers.
(d) (e)  This section applies to an application to the commission for transportation electrification programs and investments if one of the following conditions is met:
(1) The application is filed on or after January 1, 2016.
(2) The application is filed before January 1, 2016, but has an evidentiary hearing scheduled on or after July 1, 2016.
SEC. 8.
 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.